Intel Seeks Big Slice of Microservers

NEW YORK — Chipmaker Intel is looking to become the market leader in the burgeoning microserver segment that has become very prominent thanks to cloud computing and Internet services. However, as the company pushes its Xeon and Atom based offerings, analysts see chinks in its armor that a handful of ARM-based SOCs will look to exploit in 2014.

Raejeanne Skillern, director of cloud marketing at Intel, said in an interview with EE Times that Intel actually defined the category back in 2009 and maintains a consistent definition of microservers, which hit has used publicly. That definition is “low-power, one-socket scale-out shared architecture” typically involving certain chassis and certain power levels, as well as fans and cooling.

“I started defining the segment in 2009 when I proposed the name 'microserver' for the segment,” Skillern said. “One of the things we offer in this segment is the agility to move between Xeon and Atom within the product line. We believe stepping into 2014 that we have a leadership roadmap that spans all the segments.”

Skillern pointed to the rack scale architecture that Intel has been designing and said that the designs Intel has been driving bring the next level of modularity and flexibility as well as power-savings and density improvements with higher I/O speeds.

Intel is in an interesting position with its Xeon and Avoton processors for this segment and with Broadwell and Denverton -- two additional SoCs -- waiting in the wings. Avoton serves the microserver space with cold storage and entry point networking. “We are continuing with our [Xeon] E3 product line,” Skillern said. “We have Avoton which has today eight cores and what we call Broadwell–DE. That’s a product line that will sit right between these two product lines, Xeon and Atom. You’ll be hearing more about that in 2014.”

Intel announced the Avoton processor and some of the new microserver platforms such as those from NEC and Quanta which have switches built on Fulcrum into the microserver allowing for a 30% reduction in density. The company plans to bring in open network CPUs and switches into the box, Skillern said.

“Where the industry is going is towards software design architecture,” Skillern added, “which plays toward workload optimization. You can virtualize the server and put three applications on it.”

In spite of these capabilities and features -- as well as Intel’s aggressive future plans for Avoton and Denverton in the microserver segment -- the company is also seeing a challenge from chip design firm ARM and ARM-based SOCs from a number of smaller fish in the server chip market. “Without ARM shipping any kind of products in the 64-bit range it is difficult to make that comparison,” Skillern said, jabbing at ARM, which is still preparing to ship its first 64-bit offerings.

Intel is also gunning for ARM’s side of the market: low-power. In 2013, the company shipped its Xeon E3 Haswell 22-nm chip consuming as little as 13 watts of power and its Atom c2000 22-nm chip consuming as little as 6 watts. It will continue in the direction of low-power products with Broadwell and Denverton as well as Broadwell SoC 14-nm offerings. “We hold a leadership position in the market. We have architectural consistency and software compatibility in our ecosystem and we also have the technology portfolio," Skillern said. "We have created a modular design process that allows us to take our core architecture to tablets and datacenters.”

Asked if Intel could match the Mips/W of ARM-based solutions and whether Intel intends to try to match the range of IP-core accelerators that will be integrated into ARM-based microserver SoCs, Skillern said Intel has continued to work on accelerators and added that the company was aware that it had to keep its portfolio agile.

In spite of Intel’s ambitions, analysts look to possible weaknesses in their product lines and find that microserver -- although a small, emerging market—may be one of them.

“Our perception is that their percentage is very low,” said Linley Gwennap, founder and principal analyst at The Linley Group.

The vast majority of Intel’s server revenue is coming from Xeon parts. Everyone’s talking about the microserver market and how fast it’s growing. You can build something big around something small and its still doesn’t go very far. ARM hasn’t shipped much either. All the big companies you hear about like AMD haven’t really shipped yet so there’s just not much of a market there yet.

The competition will come down to cost-performance ratio. Cost will cover daily operational cost. It means power consumption of the server (not just the CPU). Performance will include not only MIPS but also how many VMs and services can be run on a single server.

Is there a comparison study of x86 vs ARM? Ideally, a benchmark study.

The natural conclusion is that Intel will reduce its profit margins considerably to be able to compete. If that trend continues, earnings per share will go down and shareholders will start to question the current strategy. I personally do not think this is sustainable.

Even though the market is very well served today, Intel has a lot of muscle. I expect that they can take a big portion of the market, but they may not be the best fit for the job. We will watch as the market changes.